Tariff blow to renewable energy sector: Unit purchase price to be reduced

Sunday, May 11, 2025 
https://www.sundaytimes.lk/

The Cabinet will next week consider a proposal to reduce the tariffs for all renewable energy-based (RE) electricity supply to the national grid.

If approved, the Energy Ministry’s memorandum will allow the Ceylon Electricity Board (CEB) to significantly lower the prices paid for every unit of electricity generated under all new private rooftop solar, mini-hydro, wind, ground-mounted solar, biomass and municipal solid waste contracts. For the first time, a tariff is also proposed for rooftop solar and solar photovoltaics (PV) systems with battery energy storage systems (BESS).

The Cabinet paper has been pending for weeks. Official sources said it would be considered at the next meeting. The changes were previously vehemently opposed by the RE sector.

Contracts signed before these adjustments will continue to be remunerated at previous rates in keeping with the respective agreements. Thus, some rooftop solar producers of up to 500 kilowatts will continue to earn Rs. 37 per unit, while others, who signed on or after July 2024 (when tariffs were last revised), will receive Rs. 27.06.

Once it takes effect, rates for rooftop solar of up to 20 kW will drop to Rs. 19.61 per unit; above 20 kW up to 100 kW to Rs. 17.46 per unit; above 100 and up to 500 kW to Rs. 15.49 per unit; above 500 kW and less than 1 MW to Rs. 15.07 per unit; and 1 MW and above to Rs. 14.46 per unit.

Under the 2009 Sri Lanka Electricity Act, RE-based electricity generation projects of 10 megawatts or less must enter into standardised power purchase agreements (SPPAs). They are periodically revised to reflect “changing economic conditions”, the Cabinet memorandum says, adding that these technology-specific, cost-reflective tariffs are required to be revised annually.

The new rates were decided upon by a 12-member committee with representatives from the Energy, Finance, Planning and Economic Development Ministries; the CEB; Lanka Electricity Company (Pvt) Ltd; the Sustainable Energy Authority; and the Central Bank.